creating and starting the venture1

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CREATING AND STARTING

THE VENTURE



SOURCES OF NEW IDEAS

1. Consumers

2. Existing companies

3. Distribution channels

4. Research and development



Methods for generating ideas

1. Focus Groups

2. Brainstorming

3. Problem Inventory Analysis



Focus groups

Group of individuals providing information in

a structured format.

Group of 8-14 participants In use since 1950s

The focus group is an excellent method for

initially screening ideas and concepts.



Brainstorming

A group method for obtaining new ideas and

solutions

People can be stimulated to greater creativityby meeting with others and participating inorganized group experiences



Rules for brainstorming

1. No criticism is allowed by anyone in the group-no negative comments

2. Freewheeling is encouraged-the wilder the idea,the better.

3. Quantity of ideas desired-the greater thenumber of ideas, the greater the likelihood of useful ideas emerging

4. Combinations and improvements of ideas areencouraged-ideas of others can be used toproduce still another new idea.



Problem inventory analysis

A method for obtaining new ideas and

solutions by focusing on problems

Consumers are provided with a list of problems in a general product category

They are then asked to identify and discuss

products in this category that have theparticular problem

Can be used to test a new product idea for

further evaluation



Creativity and problem solving

techniques Brainstorming

Reverse brainstorming

Forced relationships Scientific method

Attribute listing

Matrix charting Inspired(big-dream)approach



Brain-storming

Most well-known and widely used technique

for both creative problem solving and idea

generation. Unstructured process for generating all

possible ideas about a problem within a

limited time frame through spontaneous

contributions of participants



Process of brain-storming

Session starts with a problem statement that

is neither too broad nor too narrow

6-12 individuals are selected so that a widerange of knowledge is represented

All ideas, no matter how illogical must be

recorded, with participants not being allowedto criticize or evaluate during the

brainstorming session



Reverse Brain-storming

A group method for obtaining new ideas

focusing on the negative.

Criticism is allowed-in how many ways thisidea can fail'? care to be taken of groupmorale

Can be effectively used before other creativetechniques to stimulate innovative thinking

Identification of everything wrong with the

idea and ways to overcome these problems



Forced relationships

Developing a new idea by looking at productcombinations.

It is a technique that asks questions about objects or

ideas in an effort to develop a new idea Five steps-

1)isolate the elements of the problem

2)find the relationships between these elements

3)record the relationships in an orderly form 4)analyze the resulting relationships to find ideas or

patterns

5)develop new ideas from these patterns



Scientific method

Developing a new idea through inquiring andtesting.

Consists of principles and processes,conducting observations and experimentsand validating the hypothesis

The approach involves the entrepreneur

defining the problem, analyzing the problem,gathering and analyzing data, developing andtesting potential solutions, and choosing thebest solution



Attribute listing

Developing a new idea by looking at the

positives and negatives.

To list the attributes of an item or problemand then look at each from a variety of viewpoints

Originally unrelated objects can be broughttogether to form a new combination and

possible new uses that better satisfy a need



Matrix charting

Developing a new idea by listing important

elements on two axes of a chart

Important elements for the product areaalong two axes of a chart and then askingquestions regarding each of these elements

E.g. where can it be used? who can use it?when can it be used? how can it be used?



Big-dream approach

Developing a new idea by thinking aboutconstraints.

Requires that the entrepreneur dream about theproblem and its solution-THINKING BIG.

Every possibility should be recorded andinvestigated without regard to all the negativesinvolved or the resources required

Idea should be conceptualized without anyconstraints until an idea is developed into aworkable form



Product planning and

development process The stages in developing a new product are:

1. Idea Stage

2. Concept Stage3. Product Development Stage

4. Test Marketing Stage



Idea stage

First stage in product development process.

Promising new ideas should be identified and

impractical ones eliminated in the idea stage. Product idea is expressed in terms of its chief

values, merits and benefits.

Consumers are presented with cluster of newproduct values to determine selection

If there is no need for the suggested product,

its development be discontinued



Determining the need for a new

product idea Type of need

Timing of need

Competing ways to satisfy need Perceived benefits/risks

Price v/s.Performance features

Market size and potential Availability of customer funds



Determining the value for a new

product idea Cash Outflow

Cash Inflow

Net Cash Flow Profit

Relative Term

Compared To Other Investments



Concept stage

Second stage in product development

process.

Initial reactions to the concept are obtainedfrom potential customers or members of thedistribution channel when appropriate

Favorable features be incorporated into theproduct

Features, price and promotion should be

evaluated.



Product development stage

Third stage in product development process.

Evaluation on the basis of:

a. Consumer panelb. Product sample



Test marketing stage

Last step in the evaluation process

Provides actual sales results, which indicate

the acceptance level of consumers Positive test results indicate the degree of

probability of a successful product launch and

company formation

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